ABS Enterprises has been approached to bid on a contract to sell 20,000 voice recognition computer keyboards a year for four years. Due to technological improvements, beyond that time they will be outdated and no sales will be possible. The equipment necessary for the production will cost $2 million and will be depreciated on a straight-line basis to zero over the project's life. Production will require an investment in net working capital of $40,000 to be returned at the end of the project, and the equipment can be sold for $100,000 at the end of production. Fixed costs are $400,000 per year, and variable costs are $25 per unit. The tax rate is 40 percent, and the required return is 14 percent. Additionally, the president of ABS Enterprises will undertake the project only if it has an NPV of $50,000. The present value of an Annuity of $1 per year for 4 years discounted at 14% is $2.9137. All cash flows are assumed to occur at the end of the year. (Please note that no marks will be awarded if there are no workings provided in your answer.) Required: 1. What will be the after-tax salvage value of the equipment at the end of year 4? (1 mark) 2. What is the necessary operating cash flow (OCF) per year that will give the project an NPV of $50,000? (2 marks) 3. What bid price should the president of ABS Enterprises set for the contract? (2 marks)